How Does CA AB 1103 Affect Your Building?

As the United State's population has grown and demand for energy continues to increase it has become more important than ever before to monitor and regulate our energy consumption. Many measures have been taken at the federal, state, and even local levels to increase the sustainability of our metropolitan centers, but few policies compare to the recently enacted California law AB 1103. The bill was passed by California in 2007 and is now in effect as of January 1st, 2014. If you work in real estate chances are you've heard of AB-1103. California's Assembly Bill (AB) 1103 affects building owners who are looking to lease, finance, re-finance, or sell their entire building. AB 1103 included buildings that are 10,000 square feet and over when it was first enacted, but a stipulation increases the law's purview to include those 5,000 square feet and over on July 1st, 2016. AB 1103 is an Energy Benchmarking and Disclosure law and requires building sellers to report on their building's energy use trends using the ENERGY STAR Portfolio Manager system. ENERGY STAR works by taking into account a building's type, square footage, gas use, and electricity use to rank users in a percentile-based 1 to 100 point system.It should be noted for those familiar with ENERGY STAR that you are in compliance with AB 1103 even if your score is under the 75 points required for ENERGY STAR award certification. Completion of the Data Verification Checklist "DVC" is mandatory to AB 1103 compliance. Once a building's profile is correctly entered and utility data has been logged in Portfolio Manager the DVC must be emailed to the California Energy Commission. The law is designed to prompt building owners into taking an active role in monitoring their energy use. AB 1103 legislation creates more awareness of the ENERGY STAR program for commercial buildings and brings more commercial buildings into the ENERGY STAR fold.

The following building types are required to disclose their building energy data:AssemblyBusinessEducationalInstitutional – Assisted Living and Non-ambulatoryMercantileResidential – Transient (i.e. Hotel)StorageUtility – Parking garageThe energy disclosure requirements for AB 1103 compliance are as follows: A building owner shall disclose the ENERGY STAR Portfolio Manager "Data Verification Checklist" for the building to the prospective buyer or lessee of the entire building no later than 24 hours prior to the execution of the sales or lease contract.A building owner shall disclose the ENERGY STAR Portfolio Manager "Data Verification Checklist" for the building to the prospective lender financing the entire building no later than submittal of the loan application.A building owner shall submit an electronic copy of the "Data Verification Checklist" via email to the California Energy Commission "CEC" at AB1103report@energy.ca.govOnce a building has gone through the benchmarking process, most owners and managers that achieve ENERGY STAR award status (i.e. scores of 75-100 on a score of 1-100) continue with the program on an annual basis so they can maintain their annual award status. A current ENERGY STAR award decal is a declaration of a building’s superior energy efficiency and perceived indoor air quality and tenant comfort, and is considered a valuable asset in today’s competitive real estate market.For more information on CA AB 1103 compliance, ENERGY STAR benchmarking and certification, LEED, energy audits, CALGreen, and Mechanical-Electrical-Plumbing "MEP" / energy efficiency engineering design, visit us at our website at www.mep-llc.com.

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